CA's solar industry continues to show signs of distress

California's solar industry -- what had been a promising bright spot in the economy -- is showing signs of distress.

First it was the bankruptcy of Solyndra. Now, San Jose's SunPower, another solar panel maker, has hit rough waters -- a $370 million quarterly loss -- which will trigger layoffs and the exit of two top executives.

SunPower CEO Sunpower thinks a turn-around won't happen overnight.

"We see this as a year to maybe two years, and then we see significant demand, a resumption in significant demand growth," Werner said.

But the slowdown in sales and a flood of low-cost panels coming in from China have extended SunPower's losses this year past a half-billion dollars.

SunPower, however, has a deep-pocket partner in Total, a French company that ranks among the top oil and energy companies in the world. Total paid $1.3 billion for a 60 percent share of SunPower in June. Its president sees it as a long-term deal.

"He fully believes and plans on solar being a mainstream energy resource in the time frame of 2020 or 2030, and so he's betting on SunPower to be top three if not No. 1 in that time frame," Werner said.

Werner said. also applied for and received a $1.2 billion loan guarantee on the last day of the federal energy program in September. It's financing a 250-megawatt solar generation project in San Luis Opispo County, called the California Valley Solar Ranch.

Sunpower's partner in that project, NRG, is now the sole owner and the holder of the loan guarantee. Groundbreaking is set for next Thursday.

Given mounting competition and growing financial losses, the solar industry needs government help. So says Dan Reicher, executive director of the Stanford Center for Energy Policy and Finance.

"It's got to continue to provide strong research and development funding," Reicher said. "Second, we ought to fix not through way this important loan guarantee program and third we ought to provide reliable incentives for solar and wind and other clean energy technology."